Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5058780 | Economics Letters | 2015 | 4 Pages |
Abstract
This letter uses an augmented gravity model to revisit the effect of similarity in income distributions on bilateral trade flows. We document a robust new empirical regularity: while differences in average incomes between two countries increase trade, differences in income dispersion reduce it. Our result sheds new light on the Linder hypothesis and stresses the importance of demand-based theories of international trade.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Peter S. Eppinger, Gabriel J. Felbermayr,